Open Text is to acquire fellow document management player Information Dimensions (IDI) as the market starts to consolidate.
The Canadian company did not reveal financial details of its purchase, but analysts estimated IDI would be worth $30-40 million.
Both companies started life in the text retrieval sector and expanded their offerings in recent years to provide full document management tools. IDI also makes library management systems and has a strong market share in this vertical.
The merger makes Open Text the number one document management supplier in terms of revenue - adding IDI's $20 million sales to its $50 million - but analysts pointed out that a large percentage of IDI's revenue comes from maintenance rather than new licences. In terms of new business, the combined entity would about equal to PC Docs, they said, although Open Text is growing more rapidly.
Open Text has recently been trying to expand into the fashionable knowledge management space with its main product, Intranet Livelink. This offers document management, workflow, Internet searching, scheduling, groupware and collaboration facilities.
IDI's Basis document product will become a module to Livelink and eventually be fully integrated but, although this will add some new functionality - especially for library sites - analysts said the main motivation for the takeover was to buy market share.
"Our goal is not only to acquire technology and installed base but talent too," said vice president of marketing Abe Kleinfeld.
The companies did not comment on the future of the 170 IDI employees worldwide or whether there would be layoffs.
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